Gold-backed currencies, and even Bitcoin, are really good if you want your economy to be only this big, and never grow bigger. Eventually, a crisis will happen, and you'll say "actually, its now 1.3 yuan to the gram, because we need to build tanks", or "actually, did we say we had 8,000 tons of gold in reserve? we meant 9,000. Yeah we just counted, no you can't look at it, we have 9,000, here take the yuan and go build vaccines", or "its now illegal for citizens to own gold, turn it in at your nearest party headquarters" (even the US participated in that one!)
If the government not sticking to a backed currency is one of the biggest concerns, then that's quite high praise of the concept in and of itself! In any case the amount of currency does not determine the size of an economy. Rather the size of the economy determines the value of the currency. As economies grow in a system with relatively finite amounts of currency, the currency simply becomes worth more - people become overall wealthier and things become overall cheaper.
This is how you get things like the elderly generation thinking people are just lazy - when they were young, you could fully fund university and have enough for a down-payment on your first home through a part time job. The dollar just went much further. They don't really understand that's not the way things are anymore, especially as most are largely detached from the broader economy.
Also the 'crisis point' you mention is similarly an issue with fiat currencies. Look we're going to print a billion dollars just this once... then 10 billion... then 100 billion.. then they're printing money by the trillions and insisting that the inflation will just be 'transitory', because it always has been, until the one time it isn't. It's akin to somebody arguing that you can always put a bit more air in the balloon - after all it hasn't popped before, so why would it now?
> the size of the economy determines the value of the currency.
Economies do not grow if their currency is deflationary. If currency gains value over time, actors in the economy are disincentivized from transferring their money to other actors. Less spending means less economic activity; fewer businesses; less investment in high-risk technology research; loans get more expensive; we get stagnation and wealth inequality as individuals with money continue to accumulate it without any incentive to spend it with those who do not have as much.
"But we're in an inflationary environment right now, and there's still extreme wealth inequality" -> That's because our glorious leaders (sarcasm) found a non-currency thing they could subject to deflationary forces: Assets, like stocks and real estate. This was the effect of post-2008 monetary policy; all that extra money had to go somewhere in such a way where it would not cause significant inflation of the monetary supply, so it flooded into assets, which caused a deflationary effect there. Sure, Jeff Bezos has a few tens/hundreds of millions of actual-dollars; but his true wealth is his tens of billions in Amazon stock, which has jumped from ~$4 to ~$250 in the past 20 years.
I don't need to be convinced that printing too much currency is a bad thing and can cause too much inflation; its a matter of degree, not direction. Some might say that we printed way too much money during COVID; but others might argue that the situation would be much, much worse if we hadn't (remember: unemployment hit almost 15% during COVID; the highest number in recorded US history). Currency inflation and asset deflation are good things; but we're experiencing too much of both right now.
The USD was metal based, in one way or another, from 1792-1971, with convertibility briefly suspended following the Great Depression. The economy grew by many orders of magnitude over that time, vastly more (relatively) than it has since 1971, which is when Bretton Woods ended and the USD finally became completely free floating.
Now, just 50 years beyond that point, think about how fragile everything already seems. It's only being held together by massive fed involvement, quantitative easing, and ever more archaic economic concepts like zero or even negative interest rates. And this all during (1) extremely stable years (relative to the World Wars and much more that we previously overcame) and (2) unprecedented growth enabled by the computing revolution. Without these factors, do you really think this experiment would've seen 50?
From 1800 to 1950 there was inflation of less than 50%. [1] From 1971 to 2007 (to go just before your cutoff date) there was inflation of 528%. That in-between era of 1950 to 1971 is when the money printer started. We were still bound by Bretton Woods and so when France made a 'gold call', on all the worthless dollars they had accumulated, we simply defaulted and withdrew. A fun quote from Nixon's treasury secretary at the time, "The dollar is our currency, but it's your problem."
"actually, did we say we had 8,000 tons of gold in reserve? we meant 9,000. Yeah we just counted, no you can't look at it, we have 9,000, here take the yuan and go build vaccines"
